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FIRST DIVISION

NEW WORLD G.R. No. 197889

INTERNATIONAL
DEVELOPMENT (Phil.), Present:
INC., STEPHAN STOSS and
GEUEL F. AUSTE,
Petitioners, GESMUNDO, C.J.,
Chairperson
CAGUIOA,
LAZARO-IAVIER,
LOPEZ, M., and
-versus- LOPEZ, J., JJ.

Promulgated:

]Ut 2 8 2021
NEW WORLD
RENAISSANCE HOTEL
LABOR UNION,
Respondent.
x-------------- -------------------------------------------------x

DECISION

LAZARO-JAVIER, J.:

The Case

This petition for review assails the following issuances of the Court of
Appeals in CA-G.R. SP No. 116181 entitled "New World Renaissance Hotel
Decision 2 G.R. No. 197889

Labor Union v. National Labor Relations Commission, New World

Intenrational Development (Phil.), Inc., Stephan Stoss and Geuel F. Auste:"

1) Decision 1 dated March 14, 2011, setting aside the dispositions of the
National Labor Relations Commission (NLRC) in NLRC LAC No. 08-
002876-08/NLRC-NCR-00-02-01243-05 and directing the parties to
promptly conduct collective bargaining negotiations, and petitioners, to
pay respondent l"50,000.00 as attorney's fees.

2) Resolution2 dated July 21, 2011, denying petitioner's motion for

reconsideration and supplemental motion for reconsideration.

Proceedings before the Labor Arbiter

In NLRC-NCR Case No. 02-01243-05, respondent New World

Renaissance Hotel Labor Union filed with the NLRC a complaint for unfair
labor practice against petitioners New World International Development
(Phil.), Inc. ("hotel"), Stephan Stoss (owner), and Geuel Auste (Director of
Human Resources) for unfair labor practice. Respondent essentially alleged:

1) F<;>llowing the certification election held on July 10, 2002, it was

certified as the sole and exclusive bargaining agent of all rank and
file employees of the hotel. On September 3, 2002, it submitted its
proposal for a collective bargaining agreement (CBA) to the hotel
management but failed to get a response from the latter. For this
reason and considering the incidents of harassment against its
officers and members, it was constrained to resort to preventive
mediation proceeding before the National Conciliation and
Mediation Board (NCMB) on September 25, 2002. 3 On March 4,
2003, it submitted to petitioners its amended CBA proposal.
Petitioners' counsel replied that since a petition for cancellation of
the union's certification as bargaining agent then pended before the
Department of Labor and Employment - National Capital Region
(DOLE-NCR), it was more prudent to await the outcome of the
aforesaid petition. 4

2) The petition for cancellation was filed by a certain Diwa Dadap and
197 employees of the hotel on September 17, 2002, a week after the
Bureau of Labor Relations (BLR) denied the appeal of the hotel
against the dismissal of its petition for cancellation and a day after
the opposition of the hotel to the conduct of certification election
also got denied. On May 8, 2003, DOLE-NCR dismissed the

1 Penned by Associate J~stice Estela M. Perlas-Bernabe (now Senior Associate Justice of this Court), with
the concurrence of Associate Justices Priscilla J. Baltazar-Padilla (a retired member of this Court) and
Elihu A. Ybanez, all members of the Special Third Division, rollo, pp. 53-60.
2 Penned by Associate Justice Estela M. Perlas-Bernabe (now Senior Associate Justice of this Court), with
the concurrence of Associate Justices Bienvenido L. Reyes (a retired member of this Court) and Elihu A.
Ybanez, all members of the Third Division, id at 78-80.
3
ld at 112.
4 Id.
 Decision 3 G.R. No. 197889

petition for cancellation. Diwa Dadap appealed to the BLR under

BLR A-C-73-8-15-03. 5 By Resolution dated December 17 2003
0

the BLR dismissed the appeal and subsequently entered judgment' '
on January 16, 2004. On February 26, 2004, Diwa Dadap assailed
this Resolution before the Court of Appeals via a special civil action
for certiorari, docketed CA-G.R. SP No. 82428. 6

3) Meantime, the union filed a similar complaint, followed by an

amended complaint, for unfair legal practice, as in here, docketed as
NLRC Case No. 00-07-07978-2003. Both complaint and amended
complaint were anchored on the alleged failure of the hotel to
consider the September 2002 CBA proposal and the March 2003
Amended CBA proposal submitted by the union. 7

4) By Decision dated March 22, 2004 in NLRC Case No. 00-07-07978-

2003, the labor arbiter dismissed the complaint for unfair labor
practice on ground of prematurity. The labor arbiter held that the
cause of action of the union would accrue only after the assailed
BLR Resolution dated December 17, 2003 shall have been affirmed
with finality by the Court of Appeals. 8

5) On November 16, 2004, it submitted to the hotel its third amended

CBA proposal dated November 8, 2004, informing the latter that the
BLR Resolution December 17, 2003 had already attained finality on
January 16, 2004. By Letter dated November 22, 2004, the hotel
asserted that contrary to this statement, the Court of Appeals had yet
to resolve its petition for certiorari against the BLR Resolution
December 17, 2003. In truth, however, the Court of Appeals had
already promulgated its Decision dated November 17, 2004,
dismissing the aforesaid petition. Though it was possible that the
hotel had not yet received a copy of the decision at the time they
sent their letter to the union. 9

6) Meantime, the hotel started discriminating against the union

officers. Union Secretary Joselito Santillana, who was before given
a positive rating as Receiving Clerk - Store Room Department, was
demoted to Bellman, albeit without diminution of benefits.
Thereafter, the hotel hired two (2) casuals to perform his former
task. 10 Union officers Ramil Elnar and Norberto De Villa, both
Public Area Attendants, were demoted to Stewards, though likewise
without diminution of benefits. Two (2) casuals were hired to
perform their former tasks. 11

5
Id. at 112-113.
6
Id. at 114.
7
Id. at 113-114.
'Id.at 114.
'Id. at 114-115.
10 Id. at 116.
11
Id. at 117.

f(
 Decision 4 G.R. No. 197889

7) Consequently, the union got constrained to revive the earlier

complaint for unfair labor practice through the present complaint.

On the other hand, petitioners countered, in the main:

1) The hotel was correct in refusing to negotiate with respondent since

the resolution of the petition for certiorari in CA-G.R. SP No. 82428
is a prejudicial question. Also, the petition for cancellation of
certification filed by Diwa Dadap and 197 employees casts doubt on
respondent's status as collective bargaining agent. The hotel cannot
be faulted for being cautious and prudent. 12

2) The transfer of the aforenamed employees was a valid exercise of

management prerogative in good faith. The transfer was done in
good faith and in furtherance of the hotel's operational needs and
legitimate business reasons. In fact, they were even consulted prior
to their transfer. They accepted it though without hesitation and only
months later did they raise their objections. 13

Ruling of the Labor Arbiter

By Decision 14 dated June 13, 2008, Labor Arbiter Veneranda C.

Guerrero found petitioners not liable for unfair labor practice. She ruled that
petitioners had a valid reason not to negotiate with respondent in light of the
petition for cancellation of respondent's certification. Petitioners were only
observing judicial courtesy, thus, they were not guilty of unfair labor practice
for refusing to negotiate with respondent. Additionally, respondent failed to
adduce documentary evidence to show that there was in fact demotion, not
merely transfer, of union officers. There can be no demotion if there was non-
diminution of benefits. 15

Ruling of the NLRC

On respondent's appeal, the NLRC, by Decision 16 dated March 25,

2010 in NLRC LAC No. 08-002876-08/NLRC-NCR"00-02-01243-05,
affirmed. 17

Respondent sought a reconsideration 18 which the NLRC denied under

Resolution 19 dated July 12, 2010.

12 /d at 237.
13 Id at 237-238.
14 Id at 233-246.
15 Id at 245-246.
16 Id at 247-257.
17
Id at 256.
18 Id at 258-262.
19 Id at 266-269.
Decision 5 G.R. No. 197889

Proceedings before the Court of Appeals

In its subsequent Petition for Certiorari2° before the Court of Appeals,

respondent faulted the hotel for unjustifiably refusing to negotiate with it
notwithstanding that its status as exclusive bargaining agent of the rank and
file employees of the hotel was already confirmed with finality by BLR
Resolution dated December 17, 2003. Notably, the execution of the same was
not enjoined by the appellate court. Thus, the hotel should have responded to
its September 2002 CBA proposal, amended March 2003 CBA proposal, and
Third Amended CBA Proposal dated November 8, 2004.

In their Comment21 dated January 7, 2011, petitioners riposte that: a)

the hotel merely acted with prudence when it refused to negotiate with
respondent, whose status as the legitimate bargaining agent is still uncertain;
b) jurisprudence recognizes the employer's right to implement safeguard
measures against the commission of fraud by labor organizations; and 3) the
reassignment of some of the union officers to other posts without diminution
of benefits was done in good faith and in the exercise of management
prerogative, and with the consent of the employees concerned.

Ruling of the Court of Appeals

By its assailed Decision22 dated March 14, 2011, the Court of Appeals
reversed and ruled that: a) the pendency of a cancellation proceedings against
a union is not a bar to set in motion the mechanics of collective bargaining: b)
petitioners' refusal to negotiate, despite the final and executory BLR
Resolution dated December 17, 2003 demonstrated petitioners' utter lack of
interest in bargaining with respondent, amounting to bad faith and unfair
labor practice; and c) respondent is entitled to attorney's fees because it was
compelled to litigate in order to protect its interest. Thus:

WHEREFORE, premises considered, the instant petition for

certiorari is GRANTED. The assailed NLRC Decision date March 25,2010
and its Resolution dated July 12, 2010 are hereby REVERSED and SET
ASIDE and a new one entered (a) ordering the parties to promptly conduct
collective bargaining negotiations; and (b) ordering private respondents to
pay petitioner PS0,000.00 as and for attorney's fees.

SO ORDERED. 23

In their Motion for Reconsideration24 dated April 4, 2011, petitioners

reiterated that the labor arbiter and the NLRC did not commit grave abuse of
discretion when they dismissed the complaint. At any rate, there was no basis
for the award of attorney's fees.

20 Id at 270-287.
21 Id at 372-401.
22
Id. at 53-61.
23
Id. at 60.
24 Id at 62-76.
 Decision 6 G.R. No. 197889

In their Supplemental Motion for Reconsideration.2 5dated April 18,

2011, petitioners sought to dismiss the case on ground ofmootness, citing the
following supervening event: on December 27, 2005, twenty-four (24)
resolutions26 were passed by the rank and file employees (members) who
grouped themselves in accordance with their respective stations or
departments in the hotel. Through these resolutions, the rank-and-file
employees (members) decreed the dissolution of the union. Through Letters
dated December 27, 2005 27 and January 17, 2006, 28 the members (employees)
officially relayed this development to BLR Director Atty. Henry Parel and
Assistant Regional Director of DOLE-NCR Atty. Agatha Ann Daquigan,
respectively.

By its assailed Resolution29 dated July 21, 2011, the Court of Appeals
affirmed its Decision dated March 14, 2011. As for the issue of mootness, the
Court of Appeals ruled that having been belatedly raised for the first time on
appeal, the same cannot be resolved in the appellate proceedings.

The Present Petition

Petitioners now seek affirmative relief from the Court via Rule 45 of
the Revised Rules of Court. They reiterate that the case has become moot
because on December 27, 2005, respondent's members themselves had
resolved to dissolve the union. Some of respondent's officers had already been
promoted to supervisory positions, thus, rendering them ineligible to retain
membership in the rank-and-file union. Also, half of the original members
already resigned. The NLRC did not commit grave abuse of discretion when
it held that the hotel is not guilty of unfair labor practice when it refused to
bargain with respondent. The pending petition for cancellation against
respondent posed a prejudicial question, which called for the suspension of
the CBA negotiations. Lastly, there was no legal basis for the award of
attorney's fees by the Court of Appeals. 30

In its Comment on the Petition31 dated February 10, 2011, "respondent

union" submits that even assuming that the signatures in the resolutions to
dissolve were authentic, these signatures were definitely obtained through
pressure and intimidation. From the time the certification election was
conducted up to the failed attempts at CBA negotiations, the hotel had been
acting in bad faith. The hotel is legally obligated to bargain with the union as
the certified bargaining agent of the rank-and-file employees. Since it was
compelled to litigate to assert its right as the collective bargaining agent, it is
entitled to atton1ey's fees. 32

25
Id at 404-408.
26 /d at411-434.
27
Idat410.
28
Id. at 440.
29
Id at 78-80.
30
Id. at 9-47.
31 Id at 551-575.
32
Id
 Decision 7 G.R. No. 197889

In their Reply 33 dated June 4, 2013, petitioners assert that respondent's

claim pf supposed pressure and coercion has no evidentiary basis, but a pure
speculation.

Issue

Has the case become moot?

Ruling

A case becomes moot when it ceases to present a justiciable controversy

such that its adjudication would not yield any practical value or use. 34 It can
no longer grant any relief or enforce any right, and anything it says on the
matter will have no practical use or value. Without any legal relief that may
be granted, courts generally decline to resolve moot cases, lest the ruling result
in a mere advisory opinion. 35 Indeed, the power of the Court to adjudicate is
limited to actual ongoing controversies. Thus, and as a general rule, this Court
will not decide moot questions, or abstract propositions, or declare principles
or rules oflaw which cannot affect the result as to the thing in issue in the case
before it. 36

Here, the dissolution of respondent union by its own members is a

supervening event which rendered the case moot. Abrigo v. Flores 37 explains
the concept of 'supervening event', thus:

We deem it highly relevant to point out that a supervening event is

an exception to the execution as a matter of right of a final and immutable
judgment rule, only if it directly affects the matter already litigated and
settled, or substantially changes the rights or relations of the parties therein
as to render the execution unjust, impossible or inequitable. A supervening
event consists of facts that transpire after the judgment became final
and executory, or of new circumstances that develop after the judgment
attained finality, including matters that the parties were not aware of
prior to or during the trial because such matters were not yet in
existence at that time. x x x (Emphasis supplied)

Verily, the dissolution of respondent union, a supervening event, is a

matter which appellate courts can take judicial notice of even though the same
is raised for the first time on appeal. For such dissolution deprives these courts
of judicial authority to resolve the case, there being no longer any actual case
or controversy since one of the parties, a real party in interest, has ceased to
be. A real party in interest is a component of the concept of 'justiciable
controversy' as explained in AMCOW v. GCC, 38 viz.:

33
Id at 682-691.
34 See J.O.S. Managing Builders, Inc. v. UOBP, 795 Phil. 380, 390 (2016).
35 See Express Telecommunications Co., Inc. v. Az Communications, Inc., G.R. No. 196902, July 13, 2020.
36 Porme;.,to v. Estrada, <543 Phil. 735,738 (2010).
37 711 Phil. 251, 261-262 (2013).
38 802 Phil. I i6, 140-141. (2016).
 Decision 8 G.R. No. 197889

Basic in the exercise of judicial power whether under the traditional

or in the expanded setting - is the presence of an actual case or controversy.
For a dispute to be justiciable, a legally demandable and enforceable right
must exist as basis, and must be shown to have been violated.

Whether a case actually exists depends on the pleaded

allegations, as affected by the elements of standing (translated in civil
actions as the status of being a "real-party-in-interest," in criminal
actions as "offended party" and in special proceedings as "interested
party"), ripeness, prematurity, and the moot and academic principle that
likewise interact with one another. These elements and their interactions are
discussed greater detail below. (Emphasis supplied)

Any decision rendered for or against a person who is not a real party in
interest in the case cannot be executed. 39 Here, it would be pointless to
adjudicate the case because there is no way respondent union can still benefit
from the judgment being prayed for here precisely because respondent union
had long ceased to be. A bare accusation that the members were allegedly
forced or coerced to dissolve the union does not negate the fact of dissolution
which the members themselves promptly relayed to the concerned labor
agencies. So must it be.

ACCORDINGLY, the petition is GRANTED. The Decision dated

March 14, 2011 and Resolution dated July 21, 2011 of the Court of Appeals
inCA-G.R. SP No. 116181 are REVERSED and SET ASIDE. The Amended
Complaint dated March 7, 2005 in NLRC-NCR Case No. 02-01243-05 1s
DISMISSED on ground ofmootness.

SO ORDERED.

I II I
AMY ~ z ~ ~ I E R
Associate Justice

39 See Fernandezv. Smart Communications, Inc., G.R. No. 212885, July 17, 2019.
 Decision 9 G.R. No. 197889

WE CONCUR:

ALE ~.GESMUNDO
~~£Justice
Chairperson

JHOSE~OPEZ
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that

the conclusions in the above Decision had been reached in consultation before
the case was assigned to u'-1e writer of the opinion of the Court's Division.

G.GESMUNDO
Chief Justice
Chairperson, First Division